Vodafone Idea Shares Dip 2% Despite Supreme Court AGR Relief
AGR relief triggers 2% stock crash overnight.
Vodafone Idea Ltd. shocked the market on Tuesday as its shares dropped over 2% in morning trade, just one day after the Supreme Court allowed the government to re-examine Rs 5,606 crore in pending adjusted gross revenue (AGR) dues. The stock hit a low of Rs 9.73 before settling at Rs 9.97, down 2.01% by 10:32 a.m., while the Nifty 50 fell only 0.31%. Investors seemed to cash in on the initial relief rally, triggering a classic “sell the news” reaction despite the ruling’s long-term benefits.
The Supreme Court’s decision followed Vodafone Idea’s plea to waive penalties and interest on a Rs 9,450 crore AGR demand, much of which relates to pre-FY17 periods already settled in 2020. Solicitor General Tushar Mehta emphasized the government’s 49% stake in the company, which serves over 20 crore customers, making its survival a national interest. This rare judicial flexibility could slash dues and ease pressure on the debt-heavy telecom operator.
Global brokerage Citi called the development a “big positive,” predicting swift government relief ahead of a massive AGR payment due in March 2026. Analysts believe clarity on dues will unlock Vodafone Idea’s stalled Rs 250 billion bank funding plan, a critical step toward financial recovery. The brokerage maintained a ‘Buy’ rating on partner Indus Towers (target: Rs 460) and a ‘Buy’/High Risk call on Vodafone Idea.
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For Indus Towers, any AGR relief for Vodafone Idea means lower default risk and stable tenancy revenue. The tower company has long been exposed to Vodafone Idea’s financial struggles, making this ruling a potential game-changer for both firms. Citi expects a chain of positive events—funding, capex, and tariff hikes—if the government acts decisively in the coming weeks.
Despite the sell-off, the Supreme Court’s move offers Vodafone Idea a lifeline at a make-or-break moment. With over Rs 2 lakh crore in total liabilities, even a partial waiver could free up cash for network upgrades and competition with Jio and Airtel. Tuesday’s dip may prove to be a buying opportunity—if the government delivers the expected relief soon.
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